7.9.1.1 Regional differences

Project-based mechanisms are still in their early stages of implementation, but significant differences have emerged in the ability of developing countries to take advantage of them. This is particularly true of Africa, which, as of November 2006, lagged behind other regions in their implementation. Only two of fifty AIJ projects were in Africa. None of the twenty projects recently approved under The Netherlands carbon purchase programme, CERUPT, were in Africa (CDM for Sustainable Africa, 2004), and only 3% of the registered CDM projects were in Africa (UNFCCC, CDM, n.d.).

Yamba and Matsika (2004) identified financial, policy, technical and legal barriers inhibiting participation in the CDM in sub-Saharan Africa. Financial barriers pose the greatest challenges: low market value of carbon credits, high CDM transaction costs and lack of financial resources discourage industry participation. Policy barriers include limited awareness of the benefits of CDM and the project approval process in government and the private sector, non-ratification of the Kyoto Protocol, and failure to establish the Designated National Authorities required by CDM. Technical barriers include limited awareness of the availability of energy-saving and other appropriate technologies for potential CDM projects. Legal barriers include limited awareness in government and the private sector of the Kyoto Protocol, and the legal requirements for development of CDM projects. Limited human resources for the development of CDM projects, and CDM’s requirements on additionality are additional constraints. Other countries, for example Brazil, China and India (Silayan, 2005), have more capacity for the development of CDM projects. The Government of India (GOI, 2004) has identified energy efficiency in the steel industry as one of the priorities for Indian CDM projects.